Internet giants post strong growth
Both Alibaba and Tencent posted strong growth in first-quarter earnings as they continued to dominate the country's Internet landscape with new offerings and innovative technologies.
Tencent posted a better-than-expected profit rise of 17 percent to 27 billion yuan (US$3.96 billion) though gaming income remained flat. It is still recovering from a regulatory approval hiatus last year that prevents gaming operators from making a profit from new titles.
Revenue rose 16 per cent to 85.5 billion yuan while gaming income dipped 1percent to 28.5 billion yuan.
Tencent reported first-time revenues under the "FinTech and Business Services" category, which was up 44 percent to 21.8 billion yuan in the first quarter.
Online advertising revenue surged 25 percent to 13.4 billion yuan and value-added services, including gaming and messaging, were up 4.5 percent.
"The (payment and fintech-related) services demonstrates our success in organically incubating services with long-term growth potential. We believe that we are building solid foundations for future growth in both the consumer and industrial Internet domains,” said Ma Huateng, Tencent's chairman and CEO.
The Shenzhen-headquartered company has been stepping up investment in cloud computing for industries following the creation of a cloud and smart industries industries business group last October.
Alibaba shares were up 4 percent on the NYSE in pre-market trading after it said profits had jumped 42 percent to 20.06 billion yuan. Revenue was up 51 percent to 93.49 billion yuan, with income from the cloud unit surging 76 percent to 7.7 billion yuan.
“Our cloud and data technology and tremendous traction in new retail have enabled us to continuously transform the way businesses operate in China and other emerging markets, which will contribute to our long-term growth,” CEO Daniel Zhang said.
He said the strong performance of its core commerce business was a result of user acquisition and higher engagement as well as booming local consumer services that grabbed more wallet share of loyal shoppers.
Through its acquisition of on-demand delivery service site Ele.me, the e-commerce giant also hopes to bring consumers to use the offline services offered by collaborators beyond just purchasing physical merchandise.
"We expect revenue to be over 500 billion yuan this fiscal year (ending March 2020), reflecting our confidence and positive momentum going forward,” Maggie Wu, its chief financial officer, said.